Car makers have criticised the European Commission’s proposals to reform the way vehicles are sold and serviced as “inappropriate and too far-reaching”, The Financial Times reported.
The newspaper said that the main European motor vehicle dealer industry association claimed the proposals could eliminate thousands of small car dealerships.
The FT cited Jean-Martin Folz, president of The European Automobile Manufacturers Association (Acea), saying that changes to the rules that have protected the industry from normal competition law for 20 years would fail to reduce car prices and increase competition.
“Too radical a reform would have the opposite effects for the consumer and society as it would break the link of responsibility between manufacturer, dealer and customer,” the FT quoted Folz saying.
The industry opposed commission proposals to scrap rules that allow manufacturers to limit dealers’ activities to specific geographic areas, the FT said.
Folz argued that the change would not reduce prices and would hit smaller dealers who do not have the resources to expand geographically, the newspaper added.
The FT said that dealers faced a triple threat from the Commission, claiming that the proposals would undermine existing contracts with car makers, weaken small dealers at the expense of larger rivals and open the market to new retailers.
Folz also criticised proposals to remove the need for dealers to provide servicing and parts and to allow them to sell more than one brand from the same showroom, the FT said.
The industry would lobby both the Commission and European Union member states to change the plans, which must be finalised by September, the newspaper added.
The FT said that the Commission was expected to approve the plans, prepared by its competition department, next week but EU member states and industry organisations will have to be consulted before the new rules take effect.